QE2: Expert Opinion and Unintended Consequences

To those who are interested to read.

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From Corporate Executive Board:

QE2: Expert Opinion and Unintended Consequences
(Economix/The New York Times, 3 November 2010)

Learn which economists are for the expanded U.S. monetary stimulus and which are against it. (Ben Bernanke is for it, of course - read his Op-Ed defending QE2).

Our View:  High-growth economies are preparing for stronger currencies and asset-price inflation from the inflow of capital from QE2 into the region. Companies should be preparing for volatility in currency and commodities markets. Everyone should be watching the knock-on effects of QE2 (e.g., lower bond yields would raise pension fund liabilities in the U.S. and UK; coming currency wars).
 
 

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http://economix.blogs.nytimes.com/2010/11/03/quantitative-easing-preview/

November 3, 2010, 1:28 pm

Will Additional Fed Action Help the Economy?

By CATHERINE RAMPELL

2:26 p.m. | Updated The Federal Reserve announced today that it would buy an additional $600 billion in long-term Treasury securities by the end of June 2011.

Some Fed officials had previously weighed in on the effectiveness of additional monetary policy action, as had economists from around the world. Here’s a brief run-down of some expert opinions on the issue written up before today’s announcement:

Leaning toward more bearish or skeptical:

• Christopher Pissarides, 2010 winner of the Nobel Memorial Prize in Economic Science
• Mark Thoma, University of Oregon and writer of The Economist’s View blog
• Hale Stewart, Bonddad blog
• Martin Feldstein, Harvard University
• Donald Kohn, former vice chairman of the Federal Reserve Board
• Peter Orszag, former director of the White House Office of Management and Budget
• Mark Gilbert, Bloomberg News
• various former rate setters for the Bank of England
• Daniel L. Thornton, vice president of the Federal Reserve Bank of St. Louis
• James Hamilton, University of California, San Diego
• Bill Gross, PIMCO
• Paul Krugman, Princeton professor, The New York Times columnist and Nobel laureate
• Joseph Stiglitz, Columbia University and Nobel laureate
• Richard C. Koo, Nomura Research Institute

Leaning toward more bullish:

• David Beckworth, Texas State University in San Marcos
• James Picerno, CapitalSpectator
• Joseph E. Gagnon, Peterson Institute for International Economics (commentary from July about several specific forms of monetary stimulus)
• Mark Zandi, Moody’s Economy.com
• Richard Berner, David Greenlaw, Ted Wieseman & David Cho, Morgan Stanley
• Brad DeLong, University of California, Berkeley
• Adam Posen, an American economist serving as an external voting member of the Bank of England’s monetary policy committee

Note that these two categories I’ve created aren’t quite so clear-cut; for example, there are plenty of economists who have expressed skepticism about the effectiveness of additional quantitative easing but are supporting it nonetheless, given current political realities and the few other policy tools immediately available.

In any case, are there other good commentaries we should add to these lists? I’ll add links as you send them in.